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Appellate Review of Trial Court Reasoning

Unlike in federal court, judges in North Carolina’s state courts often invite counsel for the prevailing party to draft a proposed order on the court’s ruling. Sometimes the judge will let the parties know of the judge’s rationale through a formal memorandum of ruling or an informal email. Does that document play any role in the appellate process?

Yes, according to the Court of Appeals. In Wilmington Savings Fund Society, FSB v. Mortgage Electronic Registration Systems, Inc., the superior court judge granted a defendant’s motion for judgment on the pleadings. The written order merely stated that the defendant was entitled to judgment as a matter of law and that the plaintiff’s claims were dismissed.

However, the judge had sent the reasoning for his decision in an email to the attorneys. The judge specifically asked that his email be included in the record on appeal—a request with which the attorneys apparently complied.

On appeal, the defendant argued that the superior court judge’s email should be disregarded and that the appellate court should focus on the written order. The Court of Appeals disagreed and reiterated that the printed record and all items submitted pursuant to Appellate Rule 9 “can be used to support the parties’ briefs and oral arguments.” The court then used the reasoning in the judge’s email as a basis to reverse the decision. Specifically, the court rejected the trial court judge’s distinction between an “assignment” of a promissory note and an “acquisition” and held that the plaintiff stood in the shoes of its predecessors.

Do you typically include memoranda of rulings in the record on appeal? What duty does the appellate court have to evaluate a trial court judge’s reasoning vis-à-vis the ultimate decision? Is the answer to that question affected by the appellate standard of review? Would there have been a proper basis to exclude the email under the Appellate Rules?

Let us know your thoughts.

–Kip Nelson

*P.S. This case also presents the counterintuitive situation in which a party can appeal from an interlocutory order more than 30 days after its entry. Although the trial court’s orders were interlocutory, the parties subsequently dismissed their remaining claims and thereby transformed the interlocutory orders into a final judgment. The plaintiff could then appeal from the interlocutory orders that had been entered months earlier.

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One Response to "Appellate Review of Trial Court Reasoning"

  • Dan Gibson
    May 23, 2019 - 4:27 pm Reply

    Frequent flyers in the Business Court definitely need to know this case. In my experience, business court judges are much more likely to have extended email conversations than other superior court judges

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